Stocks declined on Friday, snapping four straight days of gains after disappointing quarterly results from bellwether companies like General Electric
The two Dow components weighed on the market as a surge in Bank of America's credit losses, as well as a steep drop in GE's revenue, dampened recovery hopes after promising earnings and data earlier in the week.
GE's stock fell 6.3 percent to $11.62 and led the S&P Industrials index <.GSPI> down 1.6 percent to 194.70. The stock was the Dow's top percentage decliner while the group led the percentage decliners' list for S&P sectors.
There was some positive news on the earnings front, with International Business Machines Corp
While IBM rallied on its outlook and profit, the company did report revenue below expectations, a fact that troubled some analysts.
So far, earnings season is good. But if you were to call it revenue season, it'd be more of a mixed bag, said Peter Boockvar, equity strategist at Miller Tabak & Co in New York, adding that strong earnings showed that companies were able to deal with cost structure, but weak revenue shows that we're still in a difficult economic environment.
Also in earnings news, Google
The Dow Jones industrial average <.DJI> dipped 0.53 of a point, or 0.01 percent, to 8,711.29. The Standard & Poor's 500 Index <.SPX> fell 3.06 points, or 0.33 percent, to 937.68 while the Nasdaq Composite Index <.IXIC> slipped 4.65 points, or 0.25 percent, to 1,880.38.
The drop followed a strong performance in Thursday's session, when all three indexes advanced on earnings optimism and strength in the technology sector.
Friday's decline is a matter of investors digesting some of the earnings we've had, said Alan Lancz, the president of Alan B. Lancz & Associates in Toledo, Ohio.
Investors are a little discouraged with Google and GE, though some of the other companies we've had recently, especially financials, surprised incredibly to the upside. I think it's neutralized and the reason we're down is because we were up yesterday. There's also a little bit of profit taking.
Even with Friday's modest pullback, all three major U.S. stock indexes are on track for their best week since mid-March. Both the Dow and the S&P 500 are set to snap four-week losing streaks.
The S&P 500 had climbed as much as 40 percent from its 12-year closing low hit in early March, but the run-up stalled in June. The benchmark index had dropped 7 percent from the rally's June peak. But after an upbeat start to second-quarter earnings season, it is up 38.7 percent from the March low.
Another factor that helped sentiment was new data that showed U.S. housing starts and building permits jumped more than expected in June, propelled by a surge in single-family home starts.
Lancz said the data shows we're starting to head in the right direction, though he added that it was too soon to call it a trend.
(Editing by Jan Paschal)